Thank you! I was feeling a bit down, but when I started thinking of those things it gave me a bit of a confidence boost.
I haven't kept up with the threads lately, so hope everyone is doing well. We're still trucking along on BS 2. I just mailed off a huge (painfully huge) payment to the car loan, and now we only owe ~$1600 on it. Woo-hoo! It might take 2 months, but I intend to pay it off before spring. Of course, I did I just cut my hours way back at work, but I'm hoping to fill in the gaps with a WAHM gig, so hopefully I can continue making big payments on that loan until it's gone.
DH's job is waaaay better this year than it was in Jan 2010.... part of my reason for cutting way back at my work is due to the new contract they got which involves quarterly out-of-town trips. Yay! We miss him on those weeks, but I'm so happy that they're busy enough now to allow me to work less!
So I ran the numbers on our tax return today and we should be able to pay off all but $1600 of our credit card debt when we get our return back. But I'll be honest and say that it scares me to part with that money. It's so much easier to buy the things we've been holding back on or put it in our savings. But I know paying down debt is better in the long run. I think my hoarding mentality comes from the fact that DH works straight commission and we never know what his check is going to be like each week. But he's been doing great and we're 3 weeks ahead on bills and have saved up enough for him to take 2 weeks off when the baby comes to help out. We also have another fund that equals six weeks of his pay (or what we need to survive) in case he hit bottom at work or got injured, etc. He bought me a couch for my birthday so there's nothing we NEED to spend the money on. If we can get the credit cards paid off we only have the cars to pay off ($15k total) and a small loan. We need to pay off these cc's right?? We have good rates on them but it still needs to be paid off! Why is it so scary to part with money?
I haven't been around on this thread in forever. I think the reason was that DP had this REALLY expensive motorcycle that we were making a monthly payment on and I was full of resentment about it. But get this, he decided he wants to sell it!! I am SO over the moon about this! Also, he is making really good money lately so I've been able to stockpile some, but I didn't want to use it to pay off the bike because part of me felt like if I did, he would never want to sell it. But he came to his own conclusion and so I sent the check off yesterday to pay the thing off. I'm embarrassed to admit that it was over $10,000. However, now we will sell the thing and use the money to fix up our kitchen and do some other odds and ends around the house. Of course I will have an emergency fund as well. My question for you all is this: should I put more into the 401k or should I work to pay down our mortgage? Currently we are putting 3% into the 401k because that is what the company matches. However we also pay PMI on our mortgage and we owe more than our house is worth. I guess I"m leaning toward throwing money toward the mortgage. What do you think?
Also, what is an acceptable emergency fund for you?
DR says 3-6 months of living expenses. But I think that's more of a reasonable goal for wealthy people (who make a lot of money). Unfortunately, for the rest of us, I think we need more, even though it's simultaneously difficult or impossible.
For example, I think a new roof probably costs close to $10k. That would be 4 months salary (not living expenses, but straight salary) for us. And that would entirely wipe out the fund (if we actually HAD $10k in it).
A new (old) car probably costs close to that amount. DR recommends "bondo buggies" (for like $2-3k in cash) but the idea is that you only drive it for a year or two until you're coasting free and clear. We'll never be coasting, and while I think buying one bondo buggie is reasonable and probably a great idea, buying them one after another for the rest of your life sounds like a bad financial deal. Why? Because you are seriously gambling on hoow long the thing is going to last. When you buy a piece of junk, you have a good chance of ending up with one that needs a new transmission in 2 months. Some buys might be good - 2 years of decent car before it falls apart on you. Others will need maintenance on the level of financing a newer car each month. I think buying a newer used car for $10k and driving it into the ground is a much better choice for people who aren't just shaking a latte habit.
Of course, for the wealthy, you would just have a sinking fund for your roof, and a sinking fund for your car, and so on, so 3-6 months expenses would really only cover a job loss and nothing else. Of course in this economy, if you lose your job it will probably be closer to 12 months before you replace it (that's what I've been seeing in my circle, anyway).
Well, if I had money coming out my ears and no fear for my job, I'd probably save 6 months expenses before seriously working on paying off the mortgage - but even so, I'd still keep fluffing the sinking funds after that, and have one for every possible conceivable cost (plus have a very good pantry). For me, I have no hope of acheiving either a FFEF or a paid off mortgage within the next decade, so I am just doing my best sending a bit extra ($20 or $30) toward the mortgage and saving the absolute most I can every month, without a particular goal except to just keep on keepin' on.
Haven't been around for a while, but I've been plugging away with putting money into savings for my teeth - just over $2K in savings now. I just file an EZ form (it's just me), so I filed online with TurboTax (free for Federal since I'm a State Farm customer - was able to do state return - IL - free on state website) and got my $910 back from the feds direct deposited in my checking account yesterday. $425 went to pay for a class I'm taking and $400 into savings for teeth, and $100 on my cc.
I've planned for some months to go out to the PNW next November for a triennial national church convention where I was going to meet up with a whole bunch of friends. Originally my priest had some thoughts about me representing our parish which meant part of my expenses would have been covered since I was already planning on going out. It was nothing official. Parish votes on Sunday who at annual meeting who our delegate will be. Priest now tells me someone else has indicated an interest in going and since this person has a close relative who works for a major airline, would fly free.
I could still go out west myself, but the cost would be over $1K for hotel, airfare, convention registration, etc. I was planning on sharing a room with a friend who is on local planning committee for convention, but airfare alone would be $$$.
I'm going to be the financially responsible adult, as difficult as it is, and NOT go. :(
That means I should very well be debt free by the end of the year! :)
We have had really good success with what you call "bondo buggies". We buy savage title cars- for those who don't know these are cars that have been totaled out and fixed to the standard of the state to be titled again with lower mileage say around 80,000 miles. Now my husband paints and we get them needing paint jobs. We also get the ones that are older say around 98-01 model years so they have been totaled out mainly due to age. Mine just need fender, bumper, and battery and it was ready to go. Not bad for only 2,500 and less than 100,000 on a '01 Nissan Altima. We bought it already fixed and titled, but can buy it non fixed or non titled if want to do work yourself for less money. We had a 97 Nissian Sentra for 6 years and 100,000 before the standard transmission lost 3rd, 4th and 5th gear in it. Just did not feel like fixing it. Got more than our money out of it. Sold it for $300 to someone who needed the body:) I think you just need to know what you are looking for and find it.
Thanks, Brandy, that's interesting. I'm certainly no snob of bondo buggies, really my only consideration is reliability (both from financial and safety perspectives). I don't know if DH or I know enough about cars to know what we're looking for. Well, hopefully this is not a decision we need to make for a long time (we plan to drive this car into the ground.. but granted we planned the same for the 2 previous ones, but one had a major unsolvable brake issue and the other, well, drove into the ground after only 3 years).
I understand. I wouldn't have a clue either- I have learned so much from my husband:) We also believe in driving our cars until the wheels fall off!!! Ask around if you don't have a good mechanic and ask them if they know of anyone who does this type of work. You never know unless you ask. We found one guy that doesn't do it very often, but once or twice a year to make a couple extra thousand dollars on the side. He goes to salvaged auto auctions(you have to have a permit to even get in or know someone who is willing to take you- it is the insurance companies auctions) and buys cars that don't need that much work then sells them on Craigslist. He knows what to look for and won't buy junk from the insurance companies, but gets them dirt cheap... I would love to get into the auction just to see what the cars go for and maybe find one to fix up for a money maker also since the hubby can do light body work and auto paint. Don't know anyone with the permits to get us in:(
Hopefully you will find someone to help you find better cars and deals- they are out there!!!!